Mostly Democrats Sign On to Make Student Loans Dischargeable in Bankruptcy

On May 4, 2017 another bill was introduced in Congress to attempt to address the student loan tragedy unfolding. This one certainly needs a sexier title but is currently called “To amend title 11 of the United States Code to make student loans dischargeable.”

The bill was sponsored in the House of Representatives by John Delaney (D, MD). Delaney said, “Student loan debt is dragging down economic growth and keeping the American Dream out of reach for many. While student loan debt is a complex problem that will require many solutions – increased support for grant programs, efforts to increase affordability, improved consumer education and transparency – we also need to reform our bankruptcy laws to help those with the absolute greatest need. Right now, there is effectively a huge student loan loophole in bankruptcy law that’s hurting real people.”

Delaney went on to say, “Bankruptcy has long been an option of last resort for individuals facing an irresolvable level of debt; bankruptcy isn’t easy or enjoyable, but it’s a necessary part of our financial system. It doesn’t make sense for students with heavy debt burdens to be worse off than someone with credit card debt or mortgage debt. Every member of Congress from every state in the country has constituents who are struggling severely because of student loan debt. At the very least we should have some basic fairness in the law.”

The Bill, H.R. 2366 is in the earliest stages of action having just been introduced for consideration. It has a long way to go and unfortunately most die on the way.